But people are still watching a whole lot of TV — perhaps as much as ever. So the more nuanced answer is that some people are swapping out the Web for TV, some of the time. And other times Web video consumption may end up leading to more TV-watching.

Here’s some evidence supporting that idea: New data from Bernstein Research that tracks TV viewing habits for Netflix streaming subscribers. It shows a drop in kids’ TV viewing — but an increase for networks like AMC and FX. Presumably that’s because Netflix users are discovering old episodes of shows like “Mad Men” and “Sons of Anarchy” on Netflix, which is prompting them to watch new episodes of those shows on cable.

This chart shows a dropoff for programming on kids’ networks like Disney and Nickelodeon:

And this chart shows spikes for AMC whenever the network shows new episodes of shows that have old episodes on Netflix:

Bernstein put its research together using data from TiVo users. So on the one hand the numbers are pinpoint accurate, since they’re tracking actual TV usage. And, on the other hand, it may not be representative of the entire country.

Still, it makes intuitive sense, and certainly syncs up with the way the Web gets used in our house: Our kids are unaware you can do anything with an iPad other than watch “Backyardigans” and “Dinosaur Train.”

Meanwhile, I just plowed through the first four seasons of “Breaking Bad” on Netflix (and iTunes) last month — and am going out of my mind waiting for the fifth season to start on AMC this summer. Let’s cook!

The El Segundo, Calif.-based online retailer, which sells purses, shoes and other accessories to members for a $39.95 a month subscription, said it has six million members and is adding about 500,000 more each month.

In an interview, CEO Adam Goldenberg also confirmed that JustFab is on track to hit $100 million in revenue this year, up from $25 million in 2010.

Its growth is being fueled by new members and international expansion, including launching in Canada and Germany.

The company, which raised $33 million in capital last September, also said it was opening up its membership club to a pay-as-you-go option that allows non-members to buy products at slightly higher prices without the monthly commitment. Otherwise, members must visit the site within the first five days of the month to either buy an item or say they want to skip a month.

JustFab, which has 320 employees, is not the only subscription company that has recently tweaked its business model. Last month, ShoeDazzle said its 10 million members will be charged only if and when they make a purchase — no matter if it is once a month or once every six months.

Goldenberg said the changes by two of the leading membership services are coincidental, and not a sign that the membership model isn’t working. In fact, he says, the business opportunity in front of the company, and other membership services like it, is huge.

“We are the largest or one of the largest in the space, but we are all really small. If you look at apparel, this opportunity is bigger than $100 billion. We’ll take market share from traditional retailers and others will, too,” Goldenberg said. “It’s going to be a big category in three to four years.”

Investors participating in the round include GGV Capital and Greylock Partners. The Mountain View, Calif., company said it will use the money to expand and hire additional employees.

Business models like Citrus Lane’s are getting pretty popular. Members sign up for a monthly subscription and get a package of products in the mail based on a particular theme.

My colleague Lauren Goode recently wrote about how Birchbox.com was branching out from sending beauty products to women to sending grooming products and consumer-tech gadgets for men. And, there are plenty of apparel companies that are also trying out the model, including Shoedazzle.

Citrus Lane’s box costs $25 a month, and offers two different versions — one for pregnant women and another for young children and parents. Contents include four to five items based on the child’s age — newborn to three years old — and include toys, snacks and other activities.

Citrus Lane Announces $5.1 Million Series A Funding from GGV Capital and Greylock Partners

Helps Parents Discover ‘Best Of’ Products For Little Ones

Mountain View, CA (April 25, 2012) – Citrus Lane (www.citruslane.com), a subscription e-commerce site that is focused on getting useful, developmentally appropriate and delightful products to young families, today announced that it has raised $5.1 million in Series A funding from GGV Capital and Greylock Partners. The company will use the funds to continue to expand its business and add critical new hires.

Each month, Citrus Lane members receive a care package of four to five “best of” products based on their child’s age for $25 per month. Citrus Lane curates its recommendations from partner brands such as Green Toys, Weleda, Zoli and Episencial.

All products are vetted by real moms. Citrus Lane also provides members with monthly editorial tips and insights and an active, vocal Facebook community of moms.

Founders Mauria Finley and Claire Hough are former executives of companies such as eBay, PayPal and NexTag that defined the first generation of Internet commerce companies. Citrus Lane combines a new generation of ecommerce with a social experience to provide a vibrant online community as well as a distribution platform for its partner brands.

“We’re building a company that helps moms – and dads – discover the best products for their babies and toddlers with the help of a trusted resource,” said Mauria Finley, founder and CEO of Citrus Lane. “We’re thrilled to have the support of Greylock and GGV Capital – they understood our business from the start and will be important partners as Citrus Lane continues to grow.”

Citrus Lane raised a seed round of financing in March 2011 and shipped its first boxes in July 2011.

“Citrus Lane is all about customer engagement. Build-and-grow models like Citrus Lane that focus on great service and consistent, long-term
word-of-mouth growth create the best opportunity for sustained growth,” said Jeff Richards, Partner, GGV Capital and new Citrus Lane board member. “We’re excited to be working with the company and look forward to working with them as they become the leader in subscription commerce.”

First look at Netflix numbers: A loss of $0.08 a share on revenue of $870 million. Wall Street was expecting revenues of $855 million and a loss of $0.27 a share. The crucial number: 23.41 million domestic streaming subscribers. Netflix had told investors to expect 22.8 million to 23.6 million.

Netflix had previously said it might lose money throughout 2012, but now says things could get better sooner, and predicts that it may turn a profit in Q2. “The improvement in the outlook is a result of continued member growth (both domestically and internationally), as well as increased efficiency of our content and marketing spending,” CEO Reed Hastings writes in his shareholder letter.

But the market isn’t happy with something — shares are down 16 percent — so we’ll try to figure out why. Perhaps this: “Q2 net adds will be below those of 2010, despite Q2 gross adds following the traditional seasonal pattern, and despite us expecting to match 2010 in annual net additions,” Hastings writes. He adds: “We see nothing new or particularly concerning this quarter to date in our member viewing, acquisition and retention. All are healthy.”

Someone disagrees.

(Update: OK, here’s Citi’s Mark Mahaney’s take on the market’s reaction. As I suspected, it is about the paragraph above — Hastings is saying subscriber growth will slow next quarter, but net out just fine for the year, and Wall Street doesn’t believe him.

“We believe this is due to concerns over the company’s Domestic Streaming Net Adds outlook — 500K Net Adds in Q2 vs. the Street at 1.2MM. NFLX is, however, laying out an outlook for 7MM Domestic Streaming Adds in 2011. This is higher than our 5MM estimate, and we believe is in-line with or higher than most Street estimates. The issue is market skepticism that NFLX can reach this level given the June Quarter guide.”)

Per usual, Hastings notes competition from Amazon and Hulu, and now Comcast’s Streampix offering. Also per usual, he says he can’t see any near-term effect from those services on his business, but promises to “watch them carefully.” And again, he argues that his long-term competition comes from the cable guys, and the promise of their “TV Everywhere” strategy.

Hastings also said the company’s expansion into U.K. and Ireland is promising. But he acknowledges what many Wall Street analysts have already concluded: Latin America will be a challenge. “The odds of us building a large, profitable business in Latin America are very good, but it will take longer than we initially thought.”

Again, here’s the “cheat sheet” from Citi’s Mark Mahaney so you can try to interpret the numbers yourself.

The New York Times says its digital paywall strategy is a success with consumers. But its digital advertising business stumbled last quarter, and dropped by 2 percent.

Times CEO Arthur Sulzberger Jr. blamed an “uneven U.S. economic environment and uncertain global conditions” for weak ad sales in general — overall ad sales were down 6.1 percent at the publisher’s core News Media Group — and said digital sales were “under pressure in the first two months of the year.”

The publisher says it expects to see similar ad results for the second quarter of 2012.

Meanwhile the Times’ About.com content farm continues to struggle, and saw its revenue drop 23.1 percent.

Times readers, though, seem happy to pay for the paper.

Circulation revenue was up 9.7 percent, and the Times has close to half a million people shelling out for digital access. The Times is trying to boost that number by pulling back on the free digital content it gives to nonsubscribers.

(Image courtesy of Shutterstock/Ritu Manoj Jethani)

Here’s the news Spotify will announce at a press event in a couple hours: A big-dollar deal with Coke.

CEO Daniel Ek made a preliminary mention of the deal during a speech at the Ad Age Digital conference and promised more details later. But we can take a rough guess at what that means right now: Coke hands the streaming music service a big check, and Spotify gives the soda company a lot of real estate.

While I’m reading tweets from the conference that talk about Spotify powering a music “platform” for Coke, I’m assuming this is a bit euphemistic.

Spotify’s deals with the music labels mean that it can only stream music via its own branded music player — it doesn’t have the ability to provide a “white label” service for other people without the labels’ permission. But I’ll ask the Spotify folks about this in a bit. (Update: Nope, no change here. This means Coke can make Spotify apps, but these will work the way everyone else’s apps work — if you want this to work, you’ve got to have the Spotify client downloaded.)

In other news: No word on a Spotify iPad app, contrary to some Web speculation over the last couple days. And as previously reported, Spotify is now letting brand advertisers offer their own apps on the service. The first batch will include offerings from Intel, AT&T and McDonalds.

MOG will open up for business in conjunction with Telstra, an Aussie telco; a partnership will let Telstra subscribers add MOG’s monthly service by checking a box on their billing statement.

These kinds of packages aren’t new, and several services — including Spotify in Sweden, Deezer in France and Rhapsody with Metro PCS in the U.S. — have been able to juice their subscriber numbers using them.

But it’s worth reminding people that the subscription music industry places a whole lot of faith in this model, and that lots of people think the subscription music model won’t really get mass adoption unless big service providers like Comcast and Verizon give it a similar boost.

The problem with that line of thought: Lots of digital media services have been trying to get the Comcasts of the world to add them into their system for a very long time. And with one brief exception — when Comcast and Rhapsody linked up — that hasn’t happened.

Still, they’re all trying quite hard to hammer out new deals.

Speaking of new deals: When is MOG going to close its deals with headphone maker Beats? I wrote about this one three weeks ago, and was told the deal was in progress but not closed. People familiar with the (proposed) transaction tell me that’s still the case. We’ll check back in a few weeks …

The pitch is simple and intuitive: All the magazines you want, delivered digitally to your tablet, for a flat fee of either $10 or $15 a month.

There are catches, of course, and we’ll get to them in a minute. But the thrust of what NIM and its publishers are trying to do here is heartening, because it shows that they’re willing to experiment, for real.

They’re keeping their core business model — curated bundles of content sponsored primarily by advertising. But they’re making a key concession by not requiring consumers to make a commitment to any particular title and letting them swap out magazines at will.

Not a coincidence: Two years after the iPad launched, consumers have only shown a mild interest in tablet magazines — digital represents just 1 percent of the industry’s circulation. Publishers need to do something.

Now, on to the catches. The good news is that most of these are solvable. The bad news is that there are a few, and for now, they’re big:

• The digital magazines require an app that will only work on Android tablets running Honeycomb. Next Issue says it will submit a version to Apple soon and hopes to have it available this summer. No word on Amazon’s Kindle Fire or Barnes & Noble’s Nook, which run earlier — and heavily modified — versions of Google’s operating system.
• You can’t get any magazine you want: Just 32 titles from the four magazine publishers in Next Issue’s joint venture: Hearst, Meredith, Time Inc. and Conde Nast. (News Corp., which also owns this Web site, is a Next Issue backer, but hasn’t put anything it owns into this offering.) That said, the list includes lots of the publishers’ best-known titles: Sports Illustrated, Fortune, the New Yorker, Vanity Fair, Esquire, Elle, Better Homes and Gardens, etc. Next Issue says it will add more “later this year,” and also plans to bring outside publishers into the offering.
• If you like reading magazines in both print and digital form, this offer won’t work for you. While publishers have recently started bundling print and digital subscriptions for the same price — essentially giving away digital in exchange for full-priced print subscriptions — these deals don’t include any print issues at all.

But for all of that, there’s plenty here to be optimistic about, whether you’re a magazine maker or a magazine reader.

Publishers have struggled to figure out how to take advantage of the iPad and other tablets, and for now they’ve ended up with something that looks and works almost exactly like a paper magazine, with a couple digital bells and whistles.

That’s not a terrible thing — some of the tablet issues work well, and publishers tell me they think they are selling them to new readers, which is a good thing.

But for two years there haven’t been many compelling reasons to pick up a tablet issue instead of a print one. Changing the basic subscription proposition, though? That makes things very interesting.

It’s also very much an experiment, which is the word every publisher I talked to about the launch used in the last couple days. “No one has done this before, and there are lots of practical reasons for that,” says Hearst’s John Loughlin, who oversees the publisher’s tablet efforts.

And publishers still have basic stuff to figure out, like how they’ll get paid for their titles. The rough idea is that they’ll get a share of revenue based on the amount of time consumers spend with their magazines, but they still need to hash out details.

The same goes for conversations about circulation and advertising. Right now, for instance, the magazines you read when you give Next Issue $10 a month (if you want monthly titles — if you want weeklies like the New Yorker, it’s $15 a month) won’t be counted in publishers’ official totals.

But all of that sounds good to me. It sounds like an industry ready to try some stuff and see what works. Just like all the start-ups that insist they want to disrupt it.

“Anybody that tells you that they have the answer, or that their model is the model that would be successful 5 years from now — they’d be suspect,” says Loughlin. “We’re very much in a learning mode.”

The fairly high-profile start-up, which was co-founded by Kim Kardashian and raised $40 million from Andreessen Horowitz, got its start as a subscription service.

For $40 a month, women would receive a pair of shoes, based on their preferences.

The catch, however, was that if you failed to log in and tell ShoeDazzle that you weren’t interested that month, they would charge you anyway. The model was reminiscent of mail-order CD clubs that drew you in with the offer of 10 albums for one cent, but then signed you up for a monthly shipment unless you opted out in advance.

Under the changes announced today, ShoeDazzle members will only be charged if and when they make a purchase — no matter if it is once a month or once every six months.

Everything else remains the same, so members will continue getting an email offering a monthly selection of shoes, selected according to their personal preferences. The shoes will also continue to be made specifically for ShoeDazzle from a variety of manufacturers in China.

Without the commitment of  having to log in every month, the site could appeal to a wider audience. Today, ShoeDazzle has 10 million members, up from three million a year ago.

“But that isn’t enough,” Strauss said in an interview. “We want tens of millions.”

As part of the changes, ShoeDazzle will also add new categories to the site, including apparel and lingerie in addition to shoes, and some handbags.

“The feedback that we’ve been getting is that when they see the shoes on the model, they want to buy the whole outfit,” Strauss said. “We want to increase our share of the closet.”

Six months ago, Strauss joined ShoeDazzle from Provide Commerce, where he was CEO. Provide Commerce is known for operating sites such as ProFlowers and RedEnvelope. ShoeDazzle’s founder, Brian Lee, is now chairman. In addition, Kardashian, who helped launch ShoeDazzle, is playing a less active role in the company today, but continues as a spokeswoman.

No enterprise. No servers. No software.

Instead, a very intriguing new social networking site called CareZone, aimed at helping people managing chronic health care issues, whether it be elderly parents, sick children or others.

The private site, subscription-based and without advertising, feels like Facebook for dealing with illness, creating an online community among family members, as well as others involved in the care.

Among the features: Profiles, journals, contacts, medication information and a lockbox for key files such as advance directives, to-dos and notes.

Having just endured my own health care issue, I can tell you all the things to take care of become pretty complex and confusing, and are mostly done via email, paper and phone calls.

Schwartz said the idea came from his own difficult experience with his child, who has a chronic illness, as well as a recent health crisis his father had.

He is bootstrapping the seven-person start-up, based in San Francisco, which he founded with Apple and Microsoft vet Walter Smith, who is CareZone’s CTO.

The cost is $48 a year, or a monthly fee of $5, for a each patient.

Here’s the video interview I did with Schwartz on CareZone:

]]> http://allthingsd.com/20120214/health-help-former-sun-ceo-jonathan-schwartz-talks-about-new-carezone-start-up/feed/ 0 http://allthingsd.com/20120126/rhapsody-arrives-in-uk-and-germany-via-napster-deal/ http://allthingsd.com/20120126/rhapsody-arrives-in-uk-and-germany-via-napster-deal/#comments Thu, 26 Jan 2012 08:01:10 +0000 Peter Kafka http://allthingsd.com/?p=167606 Streaming music service Rhapsody, which has only been available in the U.S. for the last 11 years, has finally made it to Europe. The service has finished a deal to buy one-time competitor Napster’s operations in the U.K. and Germany; last fall, Rhapsody bought Napster’s U.S. assets. Rhapsody competitor Spotify isn’t in Germany yet, but industry sources expect that to change soon.

]]> http://allthingsd.com/20120126/rhapsody-arrives-in-uk-and-germany-via-napster-deal/feed/ 0 http://allthingsd.com/20120125/honest-jessica-albas-now-an-e-commerce-geek-video/ http://allthingsd.com/20120125/honest-jessica-albas-now-an-e-commerce-geek-video/#comments Wed, 25 Jan 2012 18:05:48 +0000 Kara Swisher http://allthingsd.com/?p=167303

From the Web 1.0 Matt Damon-Ben Affleck debacle to the stunt-casting of Justin Timberlake as a Myspace impresario and everything in between, I have been more than dubious about any online effort by a celebrity.

Not surprisingly, it is usually a lot of special effects but little in the way of substance, from an entrepreneurial point of view.

So it was nice to be actually impressed by actress Jessica Alba’s fledgling effort to break into online commerce, via a new site called the Honest Company.

Using an interesting online subscription model and aimed at the modern mom, Honest sells its own private-label, eco-friendly and hipster baby diapers and biodegradable wipes, as well as organic bath/skin care and green cleaning products.

Alba, who is Honest’s president and one of its co-founders, was inspired to bootstrap the start-up after having kids and being confused as to how to find nontoxic products for them in a marketplace of questionable offerings.

Thus, she and Christopher Gavigan, author of “Healthy Child Healthy World,” hooked up with an experienced entrepreneur — Brian Lee, co-founder of ShoeDazzle and LegalZoom — to create Honest, which just launched.

Selling its own products using a monthly “bundle” model differentiates Honest from comparable sites, such as Gwyneth Paltrow’s GOOP, which focuses on classy recommendations of a wide variety of similar fare.

Right now, the online-only Honest effort is using Alba’s high profile and online clout — many millions of fans and followers on social sites like Facebook and Twitter, for example; and also viral marketing, via mommy bloggers — to get noticed.

But the proof will be if Honest can keep its customers coming back every month for more, as it expands its line. (So far, the reviews of the products have been raves, such as this one from salt & nectar.)

Here’s Alba talking about Honest with Lee, in a video interview at the company’s Santa Monica, Calif., HQ:

]]> http://allthingsd.com/20120125/honest-jessica-albas-now-an-e-commerce-geek-video/feed/ 0 http://allthingsd.com/20120112/why-rhapsody-is-probably-bigger-than-spotify-in-the-u-s/ http://allthingsd.com/20120112/why-rhapsody-is-probably-bigger-than-spotify-in-the-u-s/#comments Thu, 12 Jan 2012 11:00:24 +0000 Peter Kafka http://allthingsd.com/?p=163067 Jon Irwin is not pals with Sean Parker. He doesn’t hold splashy press conferences. He hasn’t been on the cover of Forbes.

But for now, at least, he can claim a bragging right that Spotify’s Daniel Ek doesn’t have: The CEO of Rhapsody has more paying subscribers than any other digital music service in the U.S.

Probably, that is. We can get into the numbers in a minute. But at the very least, Irwin argues, his company ought to get a bit of the attention that Spotify does.

They’re both doing the same thing, after all — trying to get consumers to pony up $10 a month for an ad-free service that lets you listen to any music you want, on your iPhone or (just about) any other device.

The big difference between the two is that while Rhapsody offers users a free trial period to sample the service, Ek’s company will let you listen to music for free forever.

That offer comes with advertising, and some restrictions — you can only do it for a certain number of hours per month, and you can’t take it with you. But that free offer, in conjunction with a big push from Facebook, is the real reason that so many people have heard about Spotify recently. Free, legal music is a pretty compelling offer.

Why hasn’t Rhapsody gone that route? Irwin has a long answer for that, but the short one is that he doesn’t think Spotify’s freemium model can convert enough subscribers to cover the costs of the music it gives away. The Spotify camp argues otherwise, but we’re not going to get an authoritative answer for some time.

In the meantime, Irwin can take can comfort in the fact that he has more Americans paying for his service than Ek does.

He thinks. Irwin says he passed the one-million mark at the end of last year. And while Spotify hasn’t broken out its U.S. subscriber total, we can guess that it has less than that. At the end of November, it said that it had 2.5 million paying subscribers worldwide. That’s 900,000 more than the 1.6 million it said it had in June, and that growth hasn’t all come in the U.S., because Facebook has been promoting the service everywhere.

Now, back to the future. Spotify is likely to keep growing for a while, thanks to that Facebook firehose, as well as international expansion — my bet is that Ek opens shop in Germany fairly soon.

But Irwin thinks that both companies are going to end up needing help from partners with much bigger reach — cable guys like Comcast, or wireless giants like Verizon — if they’re going to get real scale.

He explains in this interview we conducted yesterday at the Consumer Electronics Show:

MORE CES NEWS:

• Complete coverage
• HP’s Former CTO: Ultrabooks Are Nothing New, webOS Still Has Life Yet
• Walt Shows Off CES Gadgets for Fox Business News (Video)
• What Kind of Web Video Plans Does Sony Have? (Video)
• Fujitsu Seeking Way Into Crowded U.S. Smartphone Market
• Why Rhapsody Is (Probably) Bigger Than Spotify — In the U.S.
• Microsoft Beefing Up CeBit Presence Even as It Pulls Back on CES
• Inside the CES Lost & Found
• FCC Chairman Has New Tablet, but Same Script: More Spectrum!
• Verizon Wireless: We Want to Connect Five Devices for Every Subscriber
• Ultrabooks From HP and Lenovo That Are (Kinda, Sorta) Different
• Walt and Katie Take a Tour of CES (Video)
• Schmidt-Storm Alert: The Google Chairman Didn’t Like Your Question
• T-Mobile Expands Bobsled Messaging Service
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• Motorola CEO: We’re Going to Release Fewer Phones This Year
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• More From T-Mobile CEO: On Pricing, LTE and That Ever-Elusive iPhone
• Exclusive: New Boss Acknowledges Windows Phone Still Has “Awareness Problem”
• And You Thought Jawbone UP Was Going to Miss the CES Party!
• Interview: T-Mobile CEO Says No Second AT&T Deal Out There
• Grover Is at CES and I Am Missing It
• BlueStacks Bringing Android Apps to Windows 8
• Why the Future of TV Won’t Be Here Soon
• Nvidia’s Tegra 3 Tries to Save Battery in All Sorts of Different Ways
• Dynamic Dual Coverage: Ballmer’s Last Act in Vegas and the BCS Championship in 3-D
• Microsoft Phoning In Its Last CES Keynote
• Myspace — Yes, Myspace — Says It’s Going to Sell You Web TV
• Samsung Unveils “Super” 55-Inch OLED TV
• Nokia Unveils That LTE Windows Phone It’s Been Dying to Share
• Steve Ballmer Gives Ralph De La Vega a Very … Vigorous Greeting (Video)
• Interview: AT&T’s De La Vega on LTE, Tablets and Life After T-Mobile
• AT&T’s De La Vega: Shared Data Plans Still in the Works
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• LG Pushes 4G Smartphone Through Verizon: The LG Spectrum
• Live: AT&T’s Vegas Act Stars LTE and, Making Her Return to the Stage, Nokia
• CES Notebook: The Constant Search for Power and Vegas’ Worst-kept Secret
• Belkin Bringing Mobile TV to Lots of Cellphones, Will Anyone Tune In?
• Acer Introduces “World’s Thinnest” Ultrabook and a “Me-Too” Cloud Service
• There Better Be Some Cool Stuff at CES, Because CE Holiday Sales Data Bytes!
• CES 2012: Snooki and Bieber Are In, Gaga Is Out!
• Coming to a Smartphone Near You: Gorilla Glass 2
• RIM Hopes Next PlayBook OS Will Impress at CES
• Ultrabooks, the Ultra-Fancy New Name for Laptops
• At CES, Expect More Gadgets Telling You to Get Off the Couch
• Intel to Detail Its Phone Plans at CES Next Month
• Microsoft Pulling Out of CES After Upcoming Show
• Intel to Detail Its Phone Plans at CES Next Month
• Dell Will Drop the Flashy Vegas Act for CES This Year
• Ultrabook Conga Line Preps for CES 2012

]]> http://allthingsd.com/20120112/why-rhapsody-is-probably-bigger-than-spotify-in-the-u-s/feed/ 0 http://allthingsd.com/20120105/kindle-owners-upset-after-receiving-cryptic-subscription-offer-from-amazon/ http://allthingsd.com/20120105/kindle-owners-upset-after-receiving-cryptic-subscription-offer-from-amazon/#comments Fri, 06 Jan 2012 04:02:09 +0000 Tricia Duryee http://allthingsd.com/?p=160771 Amazon has issued an apology tonight after upsetting Kindle owners, who learned this morning that they were selected to receive a publication they didn’t sign up for — and could be charged for in the future.

The problems kicked off this morning when Amazon started sending emails to select Kindle owners, alerting them to a free trial of “The Kindle Compass.”

In the email, Amazon failed to explain what “The Kindle Compass” was, and worse, implied that customers would be charged for it going forward.

An Amazon spokesperson said a second letter has been sent this evening, explaining that “The Kindle Compass” is a pilot project, and apologizing for any confusion over the price. “We built it to always be free for customers, and you will never be charged for it,” the company told its customers.

Still, the response comes hours after much of the damage had already been done.

Angry customers flooded Kindle forums, posting more than 100 complaints to topics called “Where is Kindle Compass Magazine?” and “Auto-Subscription to the Kindle Compass??”

The confusion was understandable.

In the original message, Amazon misled consumers about the terms: “If you enjoy your free trial, do nothing and your subscription will automatically continue at the monthly subscription rate.”

However, no rate was ever mentioned.

Even worse, those who contacted Amazon customer service said the reps weren’t familiar with the publication, so the best they could do was help them to unsubscribe to ensure they would not be charged. At this point, people are still confused as to what “The Kindle Compass” is all about.

A spokesperson did not return emails asking for more clarity on what the publication is, and it’s unclear how many customers were affected (not all Kindle owners received the email).

In the forums, the complaints centered on two concerns: That Amazon would sign them up for something they did not knowingly subscribe to, and that they may be charged for it.

One consumer, who used the name “Susabelle”, wrote: “I am absolutely APPALLED. Amazon, you should be completely ashamed of yourself!! An auto-subscription to a publication I’ve NEVER heard of, that you will be auto-billing me for after 14 days? HAVE YOU LOST YOUR MIND??”

Here is the apology Amazon sent to consumers this evening:

This morning we sent you an email regarding The Kindle Compass, a new free publication built by the Kindle editorial team that we’re piloting to a small number of Kindle customers.

This email incorrectly referred to The Kindle Compass as a subscription with a free trial. We built it to always be free for customers, and you will never be charged for it. We apologize for any confusion.

If you wish to unsubscribe from the pilot for The Kindle Compass you can do so from a link in the last section of the magazine, or from the Manage Your Kindle Subscriptions page at www.amazon.com/manageyourkindlesubscriptions.

]]> http://allthingsd.com/20120105/kindle-owners-upset-after-receiving-cryptic-subscription-offer-from-amazon/feed/ 0 http://allthingsd.com/20111227/ea-star-wars-game-off-to-forceful-start-in-quest-to-catch-world-of-warcraft/ http://allthingsd.com/20111227/ea-star-wars-game-off-to-forceful-start-in-quest-to-catch-world-of-warcraft/#comments Tue, 27 Dec 2011 21:14:36 +0000 Tricia Duryee http://allthingsd.com/?p=157387 In a galaxy far, far away, Electronic Arts’ new Star Wars game may conquer Activision Blizzard’s World of Warcraft.

The new multiplayer online game has gotten off to a strong start, but has a long way to go if it plans to challenge the fan base World of Warcraft has amassed over the last six years.

So far, Electronic Arts has confirmed that Star Wars: The Old Republic has registered more than one million players since officially launching on Dec. 20. In that time, those players have created 1.66 million characters and logged more than 60 million hours of game play, which is roughly the equivalent of watching all six Star Wars movies more than four million times.

It’s a good beginning, but the game has a lot riding on it.

Star Wars: The Old Republic, which was developed by Electronic Arts-owned BioWare, cost hundreds of millions to build and took several years to develop.

The critical question is whether it has enough star power to attract players away from other titles, namely World of Warcraft, which has built a dedicated subscription base.

Today, World of Warcraft has about 10.3 million subscribers, and a year ago it was able to sell 3.3 million copies of its latest expansion pack in the first day of it being available. A fourth expansion pack, adding even more content, is expected in the near future but currently has no launch date.

Still, some analysts believe a takeover by Star Wars is possible.

Last month, Activision Blizzard said its membership base fell nearly 10 percent to 10.3 million, down from 11.4 million in March. Each subscriber represents a massive recurring revenue stream of roughly $15 a month, so that’s a tough loss to swallow.

The games in this category are not found on Facebook and they are definitely not free.

They are deep, story-telling experiences with high-end graphics that players pay a lot for. Star Wars is charging $60 for the initial software download, plus one free month. From there, it will cost the players an additional $15 a month for access, which is on par with others.

Last month, Lazard Capital Markets’ Atul Bagga downgraded Activision from “buy” to “neutral” after hearing about the drop in subscribers and after getting the results of a survey that polled 381 online gamers.

The study, which was conducted by Lazard in conjunction with Peanut Labs, found that Star Wars may benefit as World of Warcraft gets older, reports GameSpot.com.

Of those who are currently playing World of Warcraft, 50 percent of respondents said they plan to buy The Old Republic, and 95 percent of the survey’s respondents who were also participating in the Star Wars beta said they would buy the game.

Today, Electronic Arts is trading higher, up 1.8 percent, or about 37 cents, to $21.08 a share. Activision, which is also being supported by the strong launch of Call of Duty, is down about 3 cents to $12.17 a share.

]]> http://allthingsd.com/20111227/ea-star-wars-game-off-to-forceful-start-in-quest-to-catch-world-of-warcraft/feed/ 0 http://allthingsd.com/20111220/ea-banks-on-universal-appeal-of-massive-online-star-wars-game/ http://allthingsd.com/20111220/ea-banks-on-universal-appeal-of-massive-online-star-wars-game/#comments Tue, 20 Dec 2011 18:36:48 +0000 Tricia Duryee http://allthingsd.com/?p=155237 Electronic Arts is officially releasing its most ambitious online game to date, called Star Wars: The Old Republic.

The game is long overdue and over budget, but now that it is actually here, the LucasArts-blessed project is likely to become one of the company’s most significant game launches over the next decade.

The Star Wars title falls into the category of a massively mutliplayer online role-playing game (MMORPG), a subscription game that people can escape into for hours, acting out the role of characters and interacting with others inside a virtual world.

Other games in the genre have done extremely well, including Activision Blizzard’s World of Warcraft, which has more than 10 million subscribers after more than six years in existence.

In an interview, Frank Gibeau, president of EA Labels, told All Things D, “This is our most ambitious game of my career, and the biggest project ever made at Electronic Arts.”

The project started as early as 2007, when BioWare received the license from LucasArts. Electronic Arts acquired BioWare in 2008.

The game is on a completely different scale than a social game, and is closer to premium titles found on videogame consoles. But really, a better standard of comparison would be a blockbuster movie production.

“If a social game is a speedboat, this is like a nuclear-powered aircraft carrier,” Gibeau said.

There are at least 300 hours of game play possible within Star Wars: The Old Republic. EA hired 1,000 actors to perform 250,000 lines of dialogue — more than in all six “Star Wars” movies combined. The game is produced in English, French and German.

“It’s the most voiced-entertainment property in history — film, book, anything,” said Gibeau. “We are thinking of this game in terms of a 10-year life cycle.”

One of BioWare’s co-founders, Ray Muzyka, has been working on the project nonstop for the past several years. He told me that, despite having plenty of access to the game, “I still want to play it. I still haven’t scratched the surface, and it’s still compelling.”

Star Wars: The Old Republic officially launched at midnight, but has been slowly adding 200,000 players a day over the past week, to ensure that the servers were ready to handle the crush. Gibeau said that by today there will already be around 1.5 million people playing in the game.

The game costs $60 for a digital download or physical copy. The first month is free; it costs $15 a month after that.

One of the key differences between Star Wars and other MMO-style games is the voiceover, Gibeau said. Most MMOs require the player to read a lot of text in order to receive instructions on what to do next. BioWare lets the characters do the talking to make the players feel a part of the game.

“That’s the biggest overall thing we brought to the genre,” BioWare co-founder Greg Zeschuk said in an interview. “It’s an approachable story with real living and breathing characters who get to choose their own outcome. It creates a way to be attached to the game.”

“It grows on you over time,” Muzyka added. “Once you’ve played The Old Republic, you can’t go back (to other MMOs). It’s woven into the experience. That emotional engagement is very natural. … They feel alive. They feel like they are helping someone, or your alliance, or your village. You can be a hero or a villain.”

Electronic Arts is reluctant to say that it is betting the farm on the game, when it has so many other franchises and big projects in the works. But the potential for profit is an open question.

The release of Star Wars: The Old Republic will automatically draw in players because of the movie franchise’s mass-market appeal. Who doesn’t want to play the role of Luke Skywalker, Princess Leia or Darth Vader? (Except that those three names are banned in game play, since everyone can’t walk around the Republic with the same name, duh.).

Of course, EA will have to pay LucasArts handsomely for the right to use a big brand name like Star Wars. There’s no secret why other social games are generic — it’s cheaper. There are also hundreds of millions in development costs that Electronic Arts will have to recoup.

And those costs don’t stop on launch day.

EA and BioWare are already developing more content for the game, and have hired a team of customer-service reps in Ireland to take calls from players.

Gibeau defines what he would consider a successful game: “It’s certainly not a make-or-break product for our company,” he said. “Star Wars is a really important part, but it’s in the context of the larger digital transformation. I’d love to have a business that lasts for 10 years; I’d love to have millions of subscribers and a huge hit from that standpoint,” he said. “But our conservative cases are much less than that, so we are in pretty good shape from any outcome.”

Muzyka is a big poker player, so I asked how he is betting the game will do.

“I like to bet on things that win, and I think it’s going to win big,” he said.

To set the scene, the game takes place thousands of years before the rise of Darth Vader, when war between the Galactic Republic and the Sith Empire was dividing the galaxy. Players choose to play as a Jedi, a Sith, or a variety of other roles.

Watch this trailer and judge for yourself whether the game experience is as realistic as its creators claim:

]]> http://allthingsd.com/20111220/ea-banks-on-universal-appeal-of-massive-online-star-wars-game/feed/ 0 http://allthingsd.com/20111128/music-everywhere-spotifys-new-direction/ http://allthingsd.com/20111128/music-everywhere-spotifys-new-direction/#comments Tue, 29 Nov 2011 00:59:43 +0000 Peter Kafka http://allthingsd.com/?p=147814 Hey! Remember last week, when Spotify sent out that cryptic announcement about a press conference they’re holding this week, and said they’re headed in a “new direction”?

Here’s what the music service is likely to announce: The ability to let third-party developers tap into Spotify’s music library and make it available to their own users — as long as those users are already paying Spotify for a premium account.

That’s what Spotify has been discussing with developers for much of this fall. My educated guess is that the company intends to unveil its plans at its Wednesday event in New York. Evolver.fm’s Eliot Van Buskirk reached the same conclusion last week.

Spotify reps won’t comment, and I’ve yet to find a developer who says they’re working with Spotify on the new project. And developers working on some music-based apps that would be logical candidates for a Spotify tie-up tell me they’re not helping the service launch its expanded API (application programming interface).

Want more hedges? No problem: There’s an open question about whether Spotify would need to seek permission from the big music labels and publishers to open up its catalog to outsiders, or whether their existing deals will suffice. As you may recall, the last time Spotify needed permission from the labels — when it wanted to open up in the U.S. — the process took more than two years. (Shudder).

But at least some industry sources think that this is doable, and say that both Spotify and the labels envision the expanded APIs as the music industry’s version of “authentication,” or “TV Everywhere” — the TV industry plan that gives cable TV subscribers the ability to watch (some) programming on the Web or on iPad apps.

Call it “Music Everywhere.”

At least some of the big labels are “philosophically aligned with the idea of using Spotify as an ‘authentication layer,’” says an industry executive. “They see this as a value-add and they’re not worried about cannibalization.”

From a behind-the-scenes business perspective, that attitude itself is newsworthy, because the labels have for some time had a hard time figuring out just what to make of Spotify.

And I can imagine why Spotify thinks an API expansion is a big deal. “Spotify everywhere” makes the service that much stickier and useful, and it gives more users incentive to upgrade from their free accounts to paid subscriptions.

Linking up with lots of developers and services could also loosen Spotify’s dependence on Facebook, which wouldn’t be the worst idea. Facebook is currently generating a fire hose of traffic and users for Spotify via its new layout, and so far that’s been great for Daniel Ek’s company. So is the fact the services share backers, advisers and a similar view of the world. But having sources of traffic and users from places other than Mark Zuckerberg would be a healthy idea in the long run.

And for you, the average Spotify user? This won’t be nearly so meaningful.

Spotify just announced that it has 2.5 million paying subscribers, which makes it the largest Web music subscription service, by a wide margin. But the overwhelming percentage of Spotify’s users aren’t paying for the service, which would mean they won’t be able to access it from outside services.

So maybe “new direction” is an oversell. Perhaps Spotify felt it needed to say something big after Apple launched its iTunes Match service and Google rolled out its long-awaited music launch. “New options, for some” might do it. We’ll find out Wednesday.

]]> http://allthingsd.com/20111128/music-everywhere-spotifys-new-direction/feed/ 0 http://allthingsd.com/20111115/apples-itunes-match-pitch-pay-up-stick-around/ http://allthingsd.com/20111115/apples-itunes-match-pitch-pay-up-stick-around/#comments Tue, 15 Nov 2011 11:30:28 +0000 Peter Kafka http://allthingsd.com/?p=144130 Let’s assume that Apple’s iTunes Match works as advertised.

I can’t report that it does. I spent several hours futzing with the service last night, and found it balky. But I’m guessing that, just like its iCloud launch last month, Apple will work out many of the kinks over the next couple days.

In the meantime, sometimes iTunes Match did what it was supposed to do: It moved my songs — whether I bought them from Apple, acquired them legally somewhere else or flat-out stole them — from my computers to Apple’s servers. Then it let me move the files back down again to my iPhone and other machines.

That’s useful for me, and worth the $25 annual charge. But it’s great for Apple.

Because now my computer, my phone and several other devices are even more closely bound by iTunes than they were before. And it’s happening just as rival cloud services are trying to bust up Apple’s hold on my media.

Tomorrow, for instance, Google is set to finally unveil its Google Music service, which is supposed to combine a cloud/locker offering with the ability to share songs with friends who also use the service. Yesterday, Amazon started shipping its Kindle Fire tablet, which is both a media consumption device and a media obtainment device — designed to get me to buy more media from Amazon.

Meanwhile, Spotify has been pushing me — with an insistent assist from Facebook — to use its music service for free, with the hope that I’ll become so deeply enmeshed that I end up paying $10 a month for a premium account.

None of these rival services preclude me from using Apple and iTunes. In fact all of them will work, at least initially, with iTunes songs (video will be another story). And it’s possible for me to maintain parallel cloud systems if I really want to. I could use Spotify as a discovery tool, for instance, and iTunes as my gotta-have-it archive. But I’ve got limited time and attention, so the reality is that I’m going to end up picking one cloud and sticking with it.

I’ve been working with iTunes since 2001, so Tim Cook already has a very long lead — long enough that he can get away with charging me $25 a year to make it even harder for me to leave. The new guys are going to have work very hard to pull me away.

[Image via: instruct9r/Shutterstock]

]]> http://allthingsd.com/20111115/apples-itunes-match-pitch-pay-up-stick-around/feed/ 0 http://allthingsd.com/20111101/facebooks-overhaul-gives-mog-a-rocket-ride/ http://allthingsd.com/20111101/facebooks-overhaul-gives-mog-a-rocket-ride/#comments Tue, 01 Nov 2011 10:30:16 +0000 Peter Kafka http://allthingsd.com/?p=138687 Hey, guess what happens when your Web service gets access to Facebook’s 800 million users?

Bingo! Your service gets a lot more users.

We’ve seen and heard this story several times since Facebook’s most recent redesign, launched in September, which autoshares what users are reading, watching and hearing.

So services that are hooked into Facebook’s new “ticker” are seeing an influx of traffic — the same way you’d get traffic if you put up lots and lots of signs on a highway used by a half billion people per day.

Still, it continues to bear repeating, and it turns out that music subscription service MOG wants to share.

Here’s the growth for monthly active users plugged into MOG via Facebook, plotted by Inside Network’s AppData Facebook tracking service. The Facebook redesign kicked in just about a month ago, and sure enough, so did MOG’s traffic. It’s now at 160,000 monthly users, up 4x:

So that’s good, right? “This is the best distribution platform we’ve ever had,” says MOG CEO David Hyman.

He projects that if these growth rates continue, his service will have racked up 2.1 million monthly users by the end of the year. For context, Spotify, Facebook’s first among equals when it comes to music service partners, is on an even faster tear, with much bigger numbers. It already has 7.1 million monthly active users via Facebook, up from 1.1 million pre-Facebook redesign.

This is precisely what MOG was hoping would happen when it overhauled itself to offer free music to new users without requiring a credit card or any other commitment. (Competitor Rdio made a similar move, as did Spotify).

What we don’t know is how many of them will stick around. It’s entirely possible that MOG’s graph could trend down again, like it did in mid-October.

And what we really don’t know is how many of these new prospects will eventually start paying a monthly fee for access to features like mobile music. All of that free music costs MOG and its peers quite a bit, and they need to convert a minority of their users to make the model work.

There’s also a flip side to the redesign story, where some big Web sites/services that had counted on Facebook for traffic saw it drop dramatically after the overhaul. This week I chatted with a publisher who saw Facebook referrals drop by more than a third after the redesign, due to changes in the way the service surfaces shared stories from users’ friends.

That drop is similar to the effect some publishers noted after Google’s “Panda” overhaul. But the publisher I talked to this week says their sites at least were able to claw back much of that referral traffic by manually tweaking their sharing mechanisms.

]]> http://allthingsd.com/20111101/facebooks-overhaul-gives-mog-a-rocket-ride/feed/ 0 http://allthingsd.com/20111024/just-how-much-damage-did-netflix-really-do-to-itself/ http://allthingsd.com/20111024/just-how-much-damage-did-netflix-really-do-to-itself/#comments Mon, 24 Oct 2011 10:30:48 +0000 Peter Kafka http://allthingsd.com/?p=135894 How bad was Q3 for Netflix? By Wall Street’s reckoning, an unmitigated disaster: Three months ago, when the company reported its Q2 numbers, its stock was at $281. Now it’s at $117, down 58 percent.

But now we’ll get Reed Hastings’s own report card, when Netflix announces its quarterly earnings this afternoon.

As Citigroup’s Mark Mahaney notes, the key numbers to look for aren’t the Q3 metrics — the company has already preannounced that its subscriber numbers are going to be lower than it initially thought — but its guidance for the rest of the year.

That’s where we’ll be able to see the impact of its many stumbles — the price hike, the broken Starz deal, Qwikster’s New Coke moment — or at least what Netflix thinks the impact will be. If Netflix subscribers are really bailing out — and not just threatening to do so on Hastings’s Facebook page — you should be able to see that reflected in its expectations for the next three months.

Remember that shortly after Netflix dropped its first bomb this summer — a 60 percent price hike for many of its customers — management predicted that it would suffer a subscriber blip in Q3, but would recover by Q4. Let’s see if they’ve hung on to that confidence.

Here are Mahaney’s best guesses for Netflix’s Q3 results and Q4 guidance, along with Wall Street’s estimates (click image to enlarge). I’ll be covering the results live at 4 pm ET.

 

]]> http://allthingsd.com/20111024/just-how-much-damage-did-netflix-really-do-to-itself/feed/ 0 http://allthingsd.com/20111011/ex-paypal-youtube-and-yahoo-execs-raise-capital-for-kid-activities-in-a-box/ http://allthingsd.com/20111011/ex-paypal-youtube-and-yahoo-execs-raise-capital-for-kid-activities-in-a-box/#comments Tue, 11 Oct 2011 14:00:19 +0000 Tricia Duryee http://allthingsd.com/?p=130844 Mountain View, Calif.-based Kiwi Crate has raised $2 million in capital to help launch the company’s subscription-based service, which delivers a monthly package of hands-on activities for kids. The round was led by First Round Capital, with Mayfield Fund, Comcast Ventures, Felicis Ventures, Forerunner Ventures, Consigliere Brand Capital, UJ Ventures and 500 Startups also participating. The company was founded in 2011 by Sandra Oh Lin, former eBay and PayPal executive; Yu Pan, PayPal co-founder; and Yael Pasternak Valek, an ex-Yahoo product manager.

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